Asian currencies traded unevenly Wednesday, with the Japanese yen recovering from a two-day decline as renewed official warnings about excessive weakness and quarter-end flows supported demand. USD/JPY fell 0.3% to 156.91 after the yen gained as much as 0.6% to 156.38. The dollar index held near 101.42 and is headed for its strongest month since June, supported by higher U.S. rate expectations and Treasury yields as the Federal Reserve maintains its focus on inflation. The Australian dollar slipped 0.3% to $0.69 after August inflation undershot forecasts, despite the Reserve Bank of Australia (Australia's central bank) raising its cash rate by 25 basis points to 4.60% the previous day. Investors are awaiting the Fed's preferred core PCE inflation measure and Friday's nonfarm payrolls report. The Chinese yuan was broadly stable after manufacturing activity returned to expansion in September, while China threatened a resolute response to potential European Union trade restrictions.